Consolidated Uranium buys Virginia uranium project

The Coles Hill uranium deposit is in Pittsylvania County, South Central Virginia, and was first discovered in 1978. It has previously been estimated to contain indicated mineral resources of 132.9 million pounds U3O8 (51,120 tU) and inferred resources of 30.4 million pounds U3O8, although this is a "historical estimate" under NI43-101 and is not considered to be current.

Virginia Energy has previously carried out drilling at the 3000 acre site, enabling the preparation of resource estimates and a preliminary economic assessment, but development activities were suspended in 2013 after the state's then-governor decided to veto any change to Virginia's moratorium on uranium mining.

Toronto-based Consolidated's strategy is to acquire and develop uranium projects worldwide. It owns - or has options on - projects in Argentina and Australia as well as in Canada and the USA. Its recent acquisitions include the Ben Lomond project in Queensland, Australia, completed in October. The company also recently agreed to acquire the Yarranna project in South Australia.

The acquisition of Virginia Energy fits well with that strategy, complementing the company's US and overseas portfolios, and means Consolidated is now "strongly positioned as an emerging uranium market developer poised for enhanced market exposure", CEO Philip Williams said in his streamed announcement of the acquisition. The value of Virginia Energy is underpinned by the value of the land itself and by a solar option agreement signed earlier this year to evaluate the feasibility of a solar energy generation facility on part of the land, he said.

Virginia's 1982 moratorium on uranium mining has remained in place despite legal challenges. However, the state is home to four operating nuclear reactors as well as two of the world's largest nuclear companies, BWXT and Framatome, located in Lynchburg. In October this year, recently-elected Governor Glenn Youngkin called for the state to go "all-in" on innovation in nuclear: the latest version of Virginia's four-yearly energy plan calls for it to make strategic investments in innovative, emerging technologies, including hydrogen, carbon capture, storage and utilisation, and, particularly, small modular nuclear reactors.

Consolidated Uranium said this level of support for nuclear energy at the state level, combined with local support for Coles Hill, gives "confidence" that the moratorium may ultimately be overcome, making the risk/return profile of the transaction "extremely compelling".

Chairman and CEO of Virginia Energy Walter Coles - in whose ancestral land the deposit lies, described the transaction as a "tremendous outcome" for shareholders. "Under the stewardship of the Consolidated Uranium team … we feel very confident that, over time, our vision for Coles Hill to become an important source of US uranium production for the domestic nuclear industry will come to fruition," he said.

The acquisition - which is via a plan of arrangement with an exchange rate of 0.26 common shares of Consolidated Uranium per Virginia Energy Resources share - is expected to close during the first quarter of 2023 subject to receiving the necessary approvals.